ADIB profit rises to $89m, warns on outlook
Abu Dhabi, October 16, 2012
Abu Dhabi Islamic Bank (ADIB) beat analyst expectations on Tuesday with a 3 per cent rise in third-quarter net profit, but again warned earnings in the latter part of the year would be hit by global economic uncertainty and slow loan growth.
The bank, the largest sharia-compliant lender by market value in Abu Dhabi, said it made a profit of Dh328.5 million ($89.4 million) compared to Dh319.1 million in the same period last year, according to a statement.
Two analysts polled by Reuters had forecast an average profit of Dh304 million.
However, ADIB repeated concerns raised in its second-quarter earnings that growth for the rest of the year would be impacted by the negative global economic environment, adding slow loan growth was also hampering its profitability.
"Of equal concern is the continued compression of credit spreads triggered by higher competition among banks who are trying to grow their loans and advances while the market aggregate shows a low growth rate for the market as a whole," said Tirad Al Mahmoud, chief executive of ADIB.
Total loans and advances at ADIB grew 1.2 per cent during the third quarter to Dh50.9 billion from Dh50.3 billion at the end of June.
Lending growth in the UAE was flat at the end of August, compared to the end of the second quarter, according to the latest central bank figures. It has grown 1.8 per cent in total since the beginning of the year.
Impairments in the third quarter jumped 34 per cent, to Dh202.1 million, compared to the same period a year ago, of which around a quarter was related to further writedowns at a real estate subsidiary.
Total impairments for the year-to-September stood at Dh958.5 million, up from the Dh938.9 million recorded at the same point last year.
Net revenue rose 12.1 per cent to 924.1 million dirhams, from Dh824.6 million in the same quarter last year.
ADIB sold its entire 32.37 per cent stake in Bosnia Bank International Real Estate in the quarter as part of its strategy of exiting non-core businesses, the statement added.
Shares in ADIB ended Tuesday up 0.6 per cent - prior to the publication of the results. The stock has risen 3.5 per cent year-to-date, compared to a 10.2 per cent rise on the main Abu Dhabi exchange.-Reuters